Edward R. Weinstein, Esq.

Alimony, Cohabitation, Settlement Agreements and New Jersey Divorce Law

As a New Jersey attorney for the past few decades, I embrace that alimony is the most contentious financial disputes that litigants’ face when a divorce occurs. Moreover, after the divorce has been concluded, anyone who has to pay alimony to a former spouse that is living with a new partner becomes almost unbearable for that person to tolerate. This is yet another reason you must have a lawyer who only practices divorce and family law related cases. This is because you are most likely bound by whatever you agree to in your divorce settlement. To wit, if you (and your attorney) agree that cohabitation with an unrelated person shall result in an axiomatic termination of alimony, you are bound by that language. This is notwithstanding the fact that that alimony law here in New Jersey do not allow for an “automatic” end of alimony due to cohabitation absent full discovery of the facts and potentially a trial on the matter. In the decision rendered on May 4, 2016 case of Quinn v. Quinn, the Supreme Court of New Jersey held that a mutually agreed to provision in a property settlement agreement to terminate alimony upon cohabitation by the spouse receiving alimony is enforceable.

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David and Cathleen Quinn got married in the summer of 1983, and had two children together. When they divorced on January 3, 2006 they incorporated a property settlement agreement into their final judgment of divorce. At the time, David earned $ 208,900 a year. Cathleen earned $ 21,643 a year. According to the property settlement agreement, David would pay $2,643 in alimony, every two weeks. The property settlement agreement also stated that alimony payments would terminate upon either person’s death, Cathleen’s remarriage, or her cohabitation, whichever happened first.

Cathleen met John Warholak in August 2007, and David moved the court to terminate his alimony obligation in March 2010. David’s motion claimed that Cathleen moved in and started cohabiting with John. Before the hearing, Cathleen and David agreed to have the facts scrutinized under the cohabitation definition stated in the 1999 New Jersey Supreme Court case of Konzelman v. Konzelman. Cathleen admitted that she was in a romantic relationship with John, but denied cohabiting with John. During testimony, Cathleen claimed that her understanding was that cohabitation meant “living with someone on a full time basis.”

The trial court found that Cathleen acted evasively and inconsistently at trial, concluded that she acted in bad faith and was not a credible witness. Furthermore, the judge found that Cathleen and John were in an exclusive relationship and were cohabiting from January 2008 through April 2010. The property settlement agreement was found to be fair and equitable. Also, Cathleen agreed to the property settlement agreement voluntarily. Because the court determined that Cathleen had, in fact, been cohabiting with John, the judge suspended the alimony obligation for the specific length of time between January 2008 and April 2010, but refused to permanently terminate the alimony obligation. The court did award David attorney’s fees in the amount of $ 145,536.74. The court also allowed David to reduce his alimony obligation by half for fifty-six months, enough time for him to recover both the value of the payments he gave to Cathleen during the time she was cohabiting with John, and the attorney’s fees owed to him.

David appealed the decision and claimed that the Family Part should have terminated the alimony obligation instead of suspending it. He argued that the language in the property settlement agreement, in conjunction with Cathleen’s less than credible behavior at trial, demanded that the alimony obligation be terminated. In response, Cathleen cross-appealed and contended that the trial court incorrectly determined that she was cohabiting, and challenged the validity of the cohabitation provision and the attorney’s fee award.

The New Jersey Appellate Division affirmed the order and found that the Family Part correctly held that the cohabitation provision was enforceable, and that Cathleen had indeed cohabited with John. Both David and Cathleen went to the Supreme Court of New Jersey for review.

The Supreme Court of New Jersey reviewed if the Family Part could suspend the alimony obligation for only the time Cathleen cohabited, or if the judge should have permanently terminated the alimony obligation as the terms of the property settlement agreement required. The Supreme Court held that property settlements that clearly allow for the termination of alimony upon cohabitation are enforceable as long as the parties entered into the agreement voluntarily and knowingly.

The Family Part found that John had lived with Cathleen for over two years, even though he had a house of his own. He used her address as his own, made phone calls there, and was there often when she was not. Cathleen’s family and social circle also recognized their relationship as a partnership, and that they acted like a committed couple in their financial and living arrangement. At the Supreme Court of New Jersey, David argued that based on these facts, and in accordance with the property settlement agreement, the Family Part should have permanently terminated the alimony obligation, instead of merely suspending it. He contended that by suspending alimony for only the time Cathleen was cohabiting, the Family Part judge was essentially allowing her to “cohabit, lie about it, and if caught, reject the paramour, revive alimony, and then cohabit again.”

On the other hand, Cathleen argued that the Family Part acted appropriately in suspending the alimony. She contended that her relationship with John was not permanent, stable, or long-lasting, and she received no financial benefit from the relationship. She also argued that the terms of the property settlement agreement were not clear, specific, or mutually understood by both parties, and did not explicitly state how long the cohabitation had to be to terminate alimony. For these reasons, Cathleen claimed that it would be inequitable to enforce the agreement.

The Supreme Court of New Jersey stated that New Jersey public policy favors the stability of settlement agreements in family law matters. For that reasons, courts will not unnecessarily disturb a fair and equitable settlement agreement. If the intent of the contracting parties is clear, it is not the job of the court to modify or rewrite an agreement. Furthermore, in a divorce people can choose to enter into settlement agreements to hand pick the amount, terms, and duration of alimony.

For many years now, the State of New Jersey has had a policy that alimony should terminate permanently upon the remarriage of the supported spouse. This terminated alimony does not get reinstated if that marriage ends. However, cohabitation is not marriage, and does not always necessarily terminate alimony. In Quinn, the property settlement agreement explicitly stated that alimony would terminate upon cohabitation. The Supreme Court of New Jersey has enforced voluntary arrangements of this nature as long as the relationship constituted cohabitation, and the cohabitation provision of the property settlement agreement was entered into knowingly, consensually, and voluntarily.

The Family Part’s findings demonstrated that Cathleen was indeed a part of a stable, serious, and enduring relationship that constituted cohabitation as defined by Konzelman. The property settlement agreement was clear that cohabitation would terminate the alimony obligation. Therefore, the Supreme Court of New Jersey found that the Family Part and The New Jersey Appellate Division should not have crafted their own remedy, and should have enforced the mutually agreed to property settlement agreement. The majority concluded that if there is no showing of fraud, overreaching, or coercion, an agreement that cohabitation will terminate alimony, entered into by informed parties, is fully enforceable. For the court to change the agreement without any compelling reason, would eradicate the certainty the divorcing parties thought they had when they agreed to it. This would destabilize the preference of the Court for settlement of marital disputes. The Supreme Court of New Jersey found no compelling reason to change the clear, mutually agreed to, and unambiguous language of the property settlement agreement. Therefore, the New Jersey Appellate Division’s judgement was reversed.